Employment benefits for separated spouses

The separation or divorce of spouses raises several questions about the rights and obligations of each spouse, including the issue of spousal support and access to employment benefits. The governing legislation, the Divorce Act and the Family Law Act, does not provide a clear and direct answer to the issue of employment benefits. The Family Law Act RSO 1990 c F3 states in Section 30 that: "Every spouse has an obligation to provide support for himself or herself and for the other spouse, in accordance with need, to the extent that he or she is capable of doing so".

The legislation implies that a spouse with employment benefits may have to keep the uninsured spouse on their benefits if the latter has a need for something like dental or health care, depending on the circumstances. However, the key question in this legal matter is whether the employment benefits policy actually allows a separated spouse to be a recipient. If the spouse is not eligible, this becomes a moot issue.

Case law provides some guidance on the matter. For example, in the case of Kohler v Mlinarski, 2016 ONSC 5524, the respondent was no longer eligible for coverage under the applicant's employment benefits plan after separation, so this was no longer a legal issue:

Until shortly after the parties separated the respondent was covered under the applicant's employment benefits plan. While the parties dispute which of them was responsible, the fact is that the respondent is no longer eligible for this coverage.

Meanwhile, in Nobrega v MacLennan, 2019 ONSC 820, the court ordered the husband to place the wife as a recipient on his employment benefits plan and to review this arrangement at the time of the spousal support review:

This spousal support order is of indefinite duration and subject to the following: …Mr. MacLennan shall place Ms. Nobrega on his employment benefits. This provision of the order shall also be reviewed at the time of the spousal support review…Mr. MacLennan shall place Ms. Nobrega as a recipient on his employment benefits plan. This arrangement shall be reviewed at the time the spousal support amount comes up for review.

In R(T) v K(A), 2015 ONSC 6272, the husband was also ordered to maintain the wife and children as beneficiaries under his employment benefits plan. Even in the absence of a formal spousal support order, a court can still order a spouse to keep the other on their employment benefits, as demonstrated in Clarke v Dowe, 2016 ONSC 4773.

In Bari v Nassr, 2015 ONSC 4318, the court found that the wife's ongoing spousal support award, after the final order, would reflect the fact that she lost her entitlement to her husband's employment benefits due to a divorce disqualification clause in the insurance policy:

But what is most important is that, going forward, Ms. Nassr does not and will not have the benefit of extended medical and dental benefits. Although she did not advance any evidence of her actual annual claims for such benefits, my selection of a mid-range monthly payment for spousal support takes into account the loss of that benefit.

Obvious takeaways? When spouses separate, the issue of coverage under a spouse's employment benefits may arise. The legislation provides limited guidance on this issue. The most important factor is whether the uninsured spouse is eligible under the employment benefits policy. In eligible cases, courts have ordered that a spouse maintain the other on their benefits, even without a formal spousal support order. And in determining the length and amount of spousal support, the loss of entitlement to employment benefits may be taken into consideration. In conclusion, the issue of employment benefits in separation and divorce can be complex and uncertain. It is important to seek legal advice to determine the rights and obligations of each spouse in these situations.

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